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January 2020

Change in Forecast for Trucking Industry Amid Win in Los Angeles Superior Court

Since the California Supreme Court’s decision in Dynamex and the implementation of AB5, it has been all clouds and gloom for the trucking industry in California. But, the weather may be changing. Judge William Highberger’s decision on January 9, 2020 shed the first ray of sunshine on the industry’s business operations.

For the first time, Los Angeles Superior Court Judge William Highberger held that AB5/Dynamex should not be applied to the trucking industry, motor carriers or the owner-operators with whom they contract. Judge Highberger’s ruling was essentially premised upon the impracticability of truck companies to comply with Prong 2 of the ABC test (work outside its “usual business”) while also using independent owner-operators as drivers. For that reason, Judge Highberger held that AB5 conflicts with the Federal Aviation Administration Authorization Act (“FAAAA”). This is the first case to hold that AB5 should be not be applied to trucking companies, following other cases seeking such relief that were dismissed. While it is likely that this decision will be appealed – as Judge Highberger all but recommended the City Attorney do so – this is a win for the trucking industry.

Supplemental information of Judge Highberger’s decision is likely to be provided to Judge Benitez ahead of hearings in Federal Court on Monday, January 13, 2020. Judge Benitez faces identical issues as those decided by Judge Highberger. Ultimately, whatever way the court finds, the case is likely to land itself a spot on the docket of the Ninth Circuit. In the interim, trucking companies should tread cautiously as the issues are expected to continue to develop as nothing is set in stone.

Read our prior article on AB5 here.

Employment Law

Employment Law